From Dow Jones Newswires

NEW YORK (June 4, 2002) -- After the Sept. 11 terror attacks, Arlene Bascom, a 35-year old accountant, faced a dilemma: Did she and her husband want to abandon or push ahead with plans to move into a new luxury condominium being built just steps from the disaster site?

The couple had signed a contract in early 2000 to buy a two-bedroom condo in the Ritz Carlton Hotel & Residences of Battery Park, which was slated to open Oct. 9. While she knew transportation disruptions and cleanup efforts would continue for some time, she was confident downtown Manhattan would bounce back. "We believe in New York," she said.

It is a sentiment evidently held by many, as the luster seems to have returned to the city's high-end condo market.

The tragic events of Sept. 11 pushed the Ritz Carlton's opening date back several months as work crews lost access to the site and New Yorkers became reticent about living in the area. Matthew Hall, director of corporate communications for Millennium Partners, which co-owns the Ritz Carlton development, said marketing efforts were put on hold until January, and the company mulled the idea of renting the units until the sales market returned.

Prior to Sept. 11, 75 of the development's 113 units had been presold. About 15 customers pulled out of their contracts after the disaster.

Indeed, much activity -- real estate and otherwise -- dried up after Sept. 11 as the city of glitz and opulence turned uncharacteristically low-key.

Celebrities and Wall Street types abandoned -- at least publicly -- their lavish lifestyles, busy social calendars and spending sprees in favor of a more reflective posture. House parties took precedence over the latest hotel or nightclub opening.

And even real estate, where a New Yorker's address often dictates his or her social stature, took a back seat, especially on the high end. Sales of condominiums and co-ops over $2 million dropped off, sellers pulled listings and open houses went silent.

But the market appears to be rebounding.

Since April, the Battery Park Ritz Carlton has sold 10 units, Mr. Hall said. Prices range from $680,000 to $4.3 million, and plans are in the works to boost prices by 3% to 5% over the next few weeks, Mr. Hall said.

Then there's the grand opening of the latest Millennium development at 50 Central Park South just above the recently opened 277-room Ritz Carlton Hotel. On the top 11 floors of the 34-story building are 11 luxury condos that offer sweeping views of Central Park and New York's skyline, and access to Ritz Carlton's chi chi hotel services and spa.

The price tag: $22.5 million to $40 million. Already, six of the 11 have been sold, and no contracts were abandoned after Sept. 11. A marketing campaign was launched shortly after the hotel opened on May 6. "We've been having about 12 showings a week," said Mr. Hall. "There's been an incredible resurgence in broker activity and people coming back to the site."

The Central Park South development shows an even greater return to opulence. A tour through a $28 million pad almost requires a map to navigate through seemingly countless winding hallways, various wings, powder rooms, sitting rooms, walk-in closets, a library room, a study and five bedrooms. The state-of-the-art kitchen -- with its Viking appliances, granite countertops and Poggenpohl cabinetry -- is almost the size of a New Yorker's typical studio apartment.

The living room spans a space of 23 by 41 feet, with a 400-foot terrace that overlooks the park. In total, the apartment boasts 9,455 square feet.

People who rent the Ritz Carlton hotel's Royal Suite at $12,000 a night "may be the same kind of person who may be buying here," said Mr. Hall. Chris Jefferies, Millennium Partners' founder, has already snapped up the $40 million unit.

Down the street at One Central Park, 191 high-end condos are being constructed as part of the AOL Time Warner Center megadevelopment at Columbus Circle. Prices range from $1.8 million to $32.5 million.

Susan DeFranca, senior vice president of the Related Cos., a development partner at the AOL Time Warner Center, said 20 of the project's 191 units were presold prior to Sept. 11. Immediately following the disaster, she said, a number of prospective buyers put buying decisions on hold.

However, she said she's noticed business pick up significantly since February. To date, 70 of the 191 units have been sold. Singer Ricky Martin is among those who have purchased one of the luxury units.

And prices have not been cut. Richard Wallgren, director of sales at One Central Park, said the project has seen three price hikes since Sept. 11.

Brokers began marketing the Sugar Warehouse condominium project in Tribeca in February, with prices ranging from $995,000 to $3.3 million. To date, 70% of the units have been sold, according to brokerage firm Corcoran Group President Pam Liebman.

In general, sales of high-end condos plummeted following Sept. 11, with prices dropping 11% to 12% "overnight," said Ms. Liebman. However, she said sales slowly started to rebound in November and surged in April. Asking prices are now slightly above where they were before Sept. 11, she said.

Ms. Liebman recalls a two-bedroom apartment on Fifth Avenue in the '90s where the seller had to trim the price 12% to $1.45 million in order to sell it in January. Yet, last week, a similar unit two floors lower fetched $1.8 million, she said.

The executive speculates the volatile stock market has convinced people that their money is better invested in real estate these days than in stocks. Low interest rates and hype about price cuts following Sept. 11 also have played a role.

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